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Published on 5/19/2022 in the Prospect News Bank Loan Daily and Prospect News High Yield Daily.

Fitch eyes Colgate Energy positively

Fitch Ratings said it placed its ratings on Colgate Energy Partners III LLC, including its B+ issuer default rating and BB-/RR3 senior unsecured notes ratings, on ratings watch positive.

The placement follows the announcement that Centennial Resource Development, Inc. (CDEV) has agreed to an all-stock merger of equals, the agency said.

“The transaction creates the largest pure-play exploration and production (E&P) company in the Delaware basin with approximately 180,000 net acres, 40,000 net royalty acres and pro forma production of approximately 145 mboepd by 4Q22. The combined entity will also maintain a strong balance with mid-cycle leverage forecast below 1.5x. Fitch believes the pro forma size, asset and leverage profiles are consistent with BB- IDR category E&P thresholds,” the agency said in a press release.

Fitch said it aims to resolve the rating watch upon completion of the transaction, which is expected to be in second half of this calendar year.


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